Zimbabwe urges citizens to switch to rand as the country’s main currency

Zimbabwe’s central bank has urged the public to replace the US dollar with the rand as the country’s main currency.

An acute shortage of US dollars last year forced Zimbabwe to introduce a locally bonded currency, but it has not been able to address the country’s cash challenges.

There is only $200-million (about R2.5-billion) in circulation, but the economy requires $1-billion.

“We will be happy in the central bank if people use the rand more than they would use the other currencies,” said Reserve Bank deputy governor Kupukile Mlambo.

This, he said, was because Zimbabwe’s biggest trade partner was South Africa and the country had an insignificant amount of trade with the US.

“We can benchmark pricing with the rand, which we can’t do with the dollar because we trade almost nothing with the US,” Mlambo added.

However, Zimbabwe will not be joining the Rand Monetary Union, the regional body in which South Africa dictates policy.

Some economists argue that when Zimbabwe abolished its own dollar in 2009 due to hyper-inflation it should immediately have adopted the rand as the new legal tender instead of a basket of currencies that included the US dollar, the rand, the Chinese yuan and Botswana’s pula.